Melrose increases GKN hostile takeover bid to £8.1bn


Melrose has upped a hostile takeover offer for Redditch-based engineering company GKN to £8.1bn.

Under the new terms of the proposed deal, Melrose, a London-based company which invests in firms to improve their financial performance, will pay GKN investors 81p in cash for every GKN share they hold, plus 1.69 new Melrose shares. That would leave GKN shareholders owning 60 per cent of Melrose.

Under a previous offer, GKN shareholders would have received 1.49 new Melrose shares.

Melrose said that Monday’s offer, up from a previous one of £7.4bn, was its best and final offer, and that it would not be improved upon “under any circumstances”.

Melrose first approached GKN back in January, and since then the GKN board has been trying to prove to shareholders that it can create greater value for them without being taken over.

Last week, GKN – which specialises in making car and plane components – announced a $6.1bn (£4.4bn) deal to merge its car parts business with American company Dana Incorporate.

But on Monday, Melrose said that it thought that tie-up was “hasty and ill thought through”.

GKN shareholders now face a 29 March deadline to accept or reject the new Melrose offer.

“We are more convinced than ever that the Melrose team, who have decades of experience in successfully transforming businesses, are the only real choice of team to re-energise and refocus GKN to unlock its full potential,” Melrose said in its statement.

GKN said in a separate statement on Monday that its board “continues to view the offer as entirely opportunistic, and believes that its terms fundamentally undervalue GKN and its prospects”.

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